Carmakers pressed to meet sales target for zero-emission vehicles

Article by Anita Panait, on June 20, 2013

With nine states following California's lead in establishing sales targets in their territories, carmakers in the United States are now under pressure to persuade reluctant consumers to buy their zero-emission vehicles. California was the first in the US that required carmakers to have zero-emission vehicles -- electric, plug-in hybrid and hydrogen-powered models – account for around 15 percent of the new car purchases in the state by 2015.

Carmakers who failed to achieve the target face fine and possibly sales restrictions. Nine other US states, including New York and New Jersey, have followed California’s lead. Bailey Wood, legislative director of the National Automobile Dealers Association, remarked to Bloomberg that the states are essentially “forcing vehicles to be built and delivered to dealers who are forced to sell them."

One model built to meet the standards, the Honda Fit electric plug-in, had sold 83 units in the US in the first five months of 2013, according to market-researcher Autodata Corp. Honda is targeting to sell 1,100 electric Fits over two years. Around a two-year supply idling on dealers’ lots, Honda trimmed this month its lease rate by around one-third to $259 a month for both new and existing customers.

Honda announced recently that some buyers now have to wait for more EVs to be built before they can get one. Honda’s move is similar to what rivals General Motors Co. and Nissan Motor Co. had done for their Chevrolet Volt and Leaf models. Edward Cohen, Honda vice president for government and industry affairs, quipped that requiring minimum numbers of plug-in vehicle sales is "inherently a risky strategy." [source: Bloomberg]

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